While customer acquisition is clearly important for new brands, mature brands are often said to rely on defection management for maintenance and growth. Yet the theory to support this approach has been subject to very little empirical investigation. How do brands actually increase the size of their customer base? Through superior acquisition or by reducing customer defection? Or some mixture of both? Conversely, do brands decline through deficient acquisition or excessive defection? This work analyses changes in ‘first brand loyal’ customers to answer these questions, using a combination of panel data on the prescribing behaviour of doctors and a cross-sectional tracking survey for residential finance. This study is the first research to compare defection and acquisition against stochastic benchmarks for customer churn under stationary conditions. The results are surprising: for both growth and decline, unusual acquisition plays a much stronger role than unusual defection. This finding demonstrates that acquisition has been under-rated in the past and implies that prospect management is at least as important as defection reduction. A simulation shows that unusual acquisition also accounts for far more improvement in profit than does unusual defection.

Riebe, E., Wright, M., Stern, P., & Sharp, B. 2014. How to grow a brand: Retain or acquire customers? Journal of Business Research, 67(5): 990-997.

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Retailers are increasingly adding banks, gas stations, mobile services and even real estate agencies to their portfolio and branding these new ventures with the retailer name, such as Tesco Bank or Asda Money. The purpose of this paper is to test the ability of a retailer brand to stretch from traditional packaged goods categories to very different categories such as banking.
Using data from an online survey collected from 953 UK grocery buyers, this paper examines consumers’ behaviour towards UK retailer brands across four categories: soft drinks, chocolate, fuel and banking.
The results show that cross-category retailer brand purchasing is stronger between categories with similar buying behaviour (e.g. soft drinks and chocolate) than in categories with very different buying behaviour (e.g. soft drinks and banking). The behavioural spill over effects are stronger for retailer brands from the same chain and persist even for unrelated categories. However, apart from fuel, the strongest cross-purchasing occurs across competing retailer-branded offers within the same category.

Please contact the Institute for a copy of this article.

Nenycz-Thiel, M., Romaniuk, J. (2018) "How far is too far? Investigating purchasing across packaged goods and services categories for retailer branded products." Published in the European Journal of Marketing.

The objective of the paper is to examine what happens to key brand performance metrics as brands change in market share, in the context of packaged goods. The metrics are: penetration - the number of buyers a brand has; and loyalty - measured as purchase frequency (PF) and share of category requirements (SCR).
The study utilizes 24 datasets in 17 packaged goods categories in three emerging markets: China, Malaysia and Indonesia. We examine changes in penetration, loyalty and share of category requirements in the context of volume and value market share change. In addition, we examine whether initial price point and price movements influence the results.
The primary finding is that market share change is accompanied by a greater change in penetration than in any other metric. This finding is very consistent across categories and countries. The relative importance of the two loyalty metrics varies by country. SCR was a stronger factor in Indonesia; while PF was stronger in Malaysia. Analysis indicated that pricing strategy (initial price and promotional depth) did not alter the main pattern of results, suggesting the results hold for brands with different price levels and tactics.
Irrespective of circumstance, to grow in value or volume market share, brands should aim to grow in penetration, while the importance of changes in specific loyalty measures depends on market conditions.
This research extends past research on brand growth to the very different economic, geographic and cultural conditions of three crucially important emerging markets. Its main value lies in recommendations on how much to invest in building the size of the customer base versus consumer retention.

Romaniuk, J., Dawes, J., Nenycz-Thiel, M. (2018). "Modeling Brand Market Share Change in Emerging Markets". Forthcoming in the International Marketing Review.

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Price-related promotions are rife in consumer goods categories. Reports say between 50% to 60% of the total marketing budget of CPG firms are spent on temporary price promotions. Price promotions are prevalent for many reasons. These include very large sales uplifts, to maintain brand sales and shelf space, to preserve the brand’s normal price, and to combat store brands. Retailers run price promotions to signal to shoppers they are price-competitive and drive store traffic.
However, price promotions are costly. Various sources say the majority of price promotions are loss-making for both manufacturers and retailers. Unfortunately, managers become reliant on price promotions. The reason is that running promotions can help achieve sales budget for a brand in one year, but it then becomes very difficult to reduce promotion incidence the next year while maintaining market share.
This study investigates the extent to which temporary price promotions attract people who do not normally buy a brand, and whether buyers change their propensity to buy the promoted brand afterwards.

Dawes, J. (2017) "Price Promotions: examining the buyer mix and subsequent changes in purchase loyalty". Forthcoming in the Journal of Consumer Marketing.

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Short Abstract:
For brand advertisers, attracting at least some attention for their advertising is important, as this provides an opportunity for the advertisement to affect memory and nudge consumers to purchase the brand. Respondents with prior brand experience have better memory for that brand’s advertising than those without such brand experience (e.g.Vaughan, Beal, & Romaniuk, 2016). Marketers have surmised that respondents with prior brand experience must have thus paid greater attention to advertising for their brand. There is a need to systematically compare the attention users of a brand versus non-users pay to advertisements to fully understand this. Our results across 660 participants and 20 brands conducted in a simulated setting using eye-tracking suggest visual attention to 20 advertisements does not differ between users or non-users. These puzzling results call for further investigation of what drives better advertising recall for brand users, if the level of ad attention does not vary.

Keywords: Advertising, Eye-tracking, Branding

Simmonds, L., Bellman, S., Kennedy, R., Nenycz-Thiel, M., and Bogomolova, S. (2017). "Attention to advertising – users versus non-users: An eye-tracking study." ANZMAC: 1-4.

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Consumers are able to make brand choice decisions in a third of a second. It is therefore important for marketers to understand how consumers learn and recognise brands. In psychological research, it is established that words, faces, and objects learned early in life are recognised faster and more accurately than items learned later in life, known as the age of acquisition effects (AoA). This study adopts AoA theory to assess consumers’ brand name recognition. Analyses of 1000 respondents and 52 brands found early exposed brand names were recognised faster (by 14ms) and more accurately (by two percent) than late exposed brands. Brand usage recency (β=-5.71) and respondents’ age when brand was launched (β=.53) significantly predicted recognition speed but with small effect sizes (R2=.014). Results raised an interesting point on the long-term effects of childhood brand exposure and suggested that other factors may have greater influence on brand memory in adulthood.
Keywords
Age of acquisition; Memory; Brand names; Brand recognition

Phua, P., Kennedy, R., Trinh, G., Hartnett, N and Page, B. (2017). "Age of acquisition effects in brand names." ANZMAC: 1-4.

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There is no doubt that the practice of brand extension is very popular with some reports suggesting as many as 70 percent of new products are launched with existing brand names on them. This popularity appears to stem from the rather enthusiastic attention that the practice of brand extension is getting in academic journals and trade publications. Brand extension has been hailed as the way to: achieve growth in a cost controlled world; capitalize on brand assets; redefine the nature/direction of a firm's business; gain economies of scale in advertising; introduce new products without advertising; assist a new product's success through endowing it with the goodwill which allows it to more easily gain trial and distribution.
To be fair, these accolades are often tempered with the warning not to "stretch" the brand image too far, that is, attempt to use a brand name on an incongruous extension, e.g. Exxon popcorn, Sara Lee dog food, Reebok computers. However, the warning, while in itself very serious, unfortunately also gives a clear impression that it is quite easy to manage brand extension, all it takes is common sense and a little brand image research.

Sharp, Byron (1993), “Managing Brand Extension,” Journal of Consumer Marketing, 10 (3), 11-17.

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Purpose – Brand awareness is a pivotal, but often neglected, aspect of consumer based brand equity. This paper revisits brand awareness measures in the context of global brand management.

Design/methodology/approach – Drawing on the method of Laurent et al. (1995), this cross-sectional longitudinal study examines changes in brand awareness over time, with sample sizes of approximately 300 whisky consumers per wave in three countries: United Kingdom, Taiwan and Greece.

Findings –There is consistency in the underlying structure of awareness scores across countries, and over time, extending the work of Laurent et al. (1995). Results show that a relevant operationalization of brand awareness needs to account for the history of the brand. Furthermore, the nature of the variation of brand awareness over time interacts with a brand’s market share.

Research implications/limitations – When modelling the impact of brand awareness researchers need to consider two factors – the brand’s market share and whether a more stable or volatile measure is sought. This avoids miss-specifying the country level contribution of brand awareness.

Practical implications – Global brand managers should be wary of adopting a ‘one size fits all’ approach. The choice of brand awareness measure depends on the brand’s market share, and the desire for higher sensitivity or stability.

Originality/value – The paper provides one of the few multi-country investigations into brand awareness that can help inform global brand management.

Romaniuk, J, Wight, S & Faulkner, M 2016, 'Brand Awareness: Revisiting an old metric for a new world', Journal of Product and Brand Management

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We investigate whether doctors who adopt a new drug in its first year on the market tend to be heavier category prescribers. Early studies of pharmaceutical prescribing and packaged goods purchasing suggest that innovators are heavier category users; however, this finding has received little attention and the evidence remains sparse. We examine the adoption of 36 new drugs by doctors in the United Kingdom and find that, on average, the prior category prescribing rate of innovators is about 50% higher than that of non-innovators.

Stern, Philip; Wright, Malcolm (2015). "The adoption of new prescription drugs is strongly associated with prior category prescribing rate". International Journal of Research in Marketing: doi:10.1016/j.ijresmar.2015.12.002. 0167-8116.

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The study examines ten consumer goods brands that grew market share year-on year, to identify if there are commonalities in the way that key brand performance metrics change during growth. The study uses consumer panel data from the UK and US. Ten brands in a range of categories are examined. Brand metrics of penetration, repeat-purchase loyalty, cross-purchasing by other brand’s buyers, the distribution of purchase frequency, and the brand’s market share within buyer sub-groups are analyzed. The principal findings are that as these brands grew: (1) brand penetration increased far more than repeat-purchase loyalty on average; (2) the most apparent change in the buyer base was the big increase in light, or infrequent buyers, (3) they induced more cross-purchasing from most or all other competitor brands’ buyers, and (4) they grew their market share in all buyer demographic groups. Implications are that brand growth strategies should be geared towards enlarging the size of the customer base, with less emphasis on boosting loyalty. The results also suggest that specifically targeting certain sorts of buyers may be counterproductive. These findings challenge traditional assumptions in relation to brand growth and success.

Dawes, J (2016), 'Brand growth in packaged goods markets: ten cases with common patterns', Journal of Consumer Behaviour.

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